Title Insurance

What it means

An insurance policy that protects against title defects — problems with the property's ownership history — that surface after a real estate closing. Common defects include an unrecorded lien, a missing heir, a forged deed, or an old judgment that should have been paid off. There are two main kinds of policies. The owner's policy protects the buyer for as long as the buyer or their heirs own the property. The lender's policy protects the mortgage lender up to the loan amount and shrinks as the loan is paid down. The buyer usually pays the one-time premium for both policies at closing. The cost depends on the purchase price and follows a state-regulated rate. Title insurance is different from homeowners insurance — title covers ownership history, homeowners covers physical damage and liability. A title search before closing tries to catch problems early, and the title insurance covers anything missed.

When you might hear this

Title insurance protects a homebuyer or lender against problems with a property's title that show up after closing — like an old lien, an unknown heir, or a forged signature in the chain of ownership. Most NY home purchases include both an owner's policy and a lender's policy.

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